Executive Briefings

The State of the Healthcare Supply Chain

Eric O'Daffer, research director with Gartner, joins us for an update on the major issues affecting the healthcare supply chain, including the potential impact of healthcare reform.

"More of the same - just more aggressive." That's the picture O'Daffer paints of the healthcare sector today, versus the previous year. Healthcare systems are under increasing pressure to take cost out of their systems. Legislative reform is forcing them to prepare for changing or shrinking reimbursements.

It's all about cost, O'Daffer says. Traditional methods of pricing no longer apply. Different economic models are coming into play, with the old fee-for-service setup headed for extinction.

At the same time, he says, healthcare systems and hospitals are consolidating at a faster rate. The combined entities are demanding more visibility into end-to-end costs.

On the manufacturing side, there is a significant amount of global expansion. In terms of growth, the North American market is less of a factor than new and emerging parts of the world. For providers, the challenge lies in figuring how to serve those new markets efficiently.

Also due for a change is the way in which providers work with suppliers. In this case, cost isn't the only issue. "There's a move afoot at the strongest sourcing supply chains to work with suppliers more strategically," says O'Daffer.

One might assume that this trend simply pushes providers' problems upstream to their suppliers. That's true to an extent, O'Daffer says, but manufacturers are also working to gain better visibility of product throughout the chain. "The information is there," he says, "but in many cases it's held in silos. Getting that information, and pushing it all the way back to manufacturers so they can have an integrated supply chain, is the holy grail."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, healthcare supply chain, supply chain management, supply management, inventory management, inventory control, supply chain planning, sourcing solutions

"More of the same - just more aggressive." That's the picture O'Daffer paints of the healthcare sector today, versus the previous year. Healthcare systems are under increasing pressure to take cost out of their systems. Legislative reform is forcing them to prepare for changing or shrinking reimbursements.

It's all about cost, O'Daffer says. Traditional methods of pricing no longer apply. Different economic models are coming into play, with the old fee-for-service setup headed for extinction.

At the same time, he says, healthcare systems and hospitals are consolidating at a faster rate. The combined entities are demanding more visibility into end-to-end costs.

On the manufacturing side, there is a significant amount of global expansion. In terms of growth, the North American market is less of a factor than new and emerging parts of the world. For providers, the challenge lies in figuring how to serve those new markets efficiently.

Also due for a change is the way in which providers work with suppliers. In this case, cost isn't the only issue. "There's a move afoot at the strongest sourcing supply chains to work with suppliers more strategically," says O'Daffer.

One might assume that this trend simply pushes providers' problems upstream to their suppliers. That's true to an extent, O'Daffer says, but manufacturers are also working to gain better visibility of product throughout the chain. "The information is there," he says, "but in many cases it's held in silos. Getting that information, and pushing it all the way back to manufacturers so they can have an integrated supply chain, is the holy grail."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, healthcare supply chain, supply chain management, supply management, inventory management, inventory control, supply chain planning, sourcing solutions